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MS ANTITRUST : Report: Microsoft paid CCIA official

The antitrust settlement between Microsoft Corp. and the Computer and Communications Industry Association (CCIA) announced earlier this month included a payment of US$9.75 million to the CCIA’s president, according to a report published Wednesday.

Almost half of the US$19.75 million total settlement went to Ed Black, the president and chief executive officer of the Washington. D.C.-based industry organization since 1995, in a deal approved by the CCIA board, according to a report in the Financial Times (FT) newspaper, citing confidential documents.

A spokesman from Microsoft declined to comment on the FT report while the CCIA in Europe referred questions to Black, who could not be reached.

On November 8, it was announced that Microsoft had reached agreements with the CCIA and Novell Inc., both of which had been major Microsoft opponents in a six-year anticompetition case before the European Union’s (E.U.’s) executive branch, the European Commission.

As part of the settlement, the CCIA agreed to withdraw from any legal proceedings against Microsoft regarding the Commission’s competition ruling and the subsequent appeal currently before the E.U.’s second highest court, the European Court of First Instance (CFI). The CCIA also withdrew the complaint it filed to the Brussels regulator in 2003, leaving RealNetworks Inc. as the last remaining company with a broad-based complaint in the Commission’s case.

But the CCIA deal with Microsoft did not sit well with all of the companies serving on the CCIA board, which includes Sun Microsystems Inc., Yahoo Inc. and Oracle Corp. The Finnish handset maker, Nokia Corp., resigned from the board because it disagreed with the terms of the deal.

“The settlement content and process were inappropriate,” said Nokia spokeswoman Arja Suominen on Wednesday. “That’s why we left the association.” Suominen declined further comment. According to the FT report, an annex to the agreement with the CCIA included a “one-time bonus” to Black along with a salary of US$500,000 a year for the next three years. Furthermore, the agreement distinguishes between Microsoft’s overall payment to the CCIA and the payments Black received.

At the time the deal was announced, the CCIA said that it was not retracting or changing positions taken in the past. However, Brad Smith, senior vice president and general counsel for Microsoft, did say the deals with the CCIA and Novell clearly demonstrated the E.U. does not need to be involved with competition matters that can be settled directly between the companies in question.

CFI President Bo Vesterdorf called a meeting for Thursday to discuss procedural matters surrounding the withdrawal of the CCIA and Novell from the case. Judge Vesterdorf is currently considering a request from the Redmond, Washington, software company that he issue an interlocutory order to suspend the Commission remedies against Microsoft until the CFI decides whether to affirm or annul the decision.

— With files from John Blau and Simon Taylor

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